Maine State Employees Association v. State of Maine, MLRB No. 92-19 (Employer Representative Reiche dissenting in part, Jan. 6, 1994), Rev'd, No. CV-94-27 (Me. Super. Ct., Ken. Cty., May 10, 1994), Superior Court Judgment Vacated, complaint dismissed sub nom, Bureau of Employee Relations v. Maine Labor Relations Board, 655 A.2d 326 (Me. 1995). STATE OF MAINE MAINE LABOR RELATIONS BOARD Case No. 92-19 Issued: January 6, 1994 ____________________________________ ) MAINE STATE EMPLOYEES ASSOCIATION, ) ) Complainant, ) ) v. ) DECISION AND ORDER ) STATE OF MAINE, ) ) Respondent. ) ____________________________________) This case began with the December 31, 1991, filing of a prohibited practice complaint with the Maine Labor Relations Board (Board) in which the Maine State Employees Association (Association) alleges that the State of Maine (State) has interfered with, restrained and coerced Association employees, has "violated its obligation to bargain in good faith" and has "interfered with the existence and administration of [the Association]," in violation of 26 M.R.S.A. 979-C(1)(A), (C) and (E) (1988). More specifically, the complaint alleges that between July 1 and 17, 1991, the State repudiated its collective bargaining agreements with employees represented by the Association in the Supervisory Services, Professional and Technical Services, Administrative Services, Law Enforcement Services, and Operational, Maintenance and Support Services collective bargaining units by engaging in a "secondary lockout" of state employees working in those bargaining units. As a remedy the Association requests a Board finding "that the State's actions violated the above-cited provisions of the State Employees Labor Relations Act [(SELRA)], and that the State be ordered to post a notice in all its work places to that effect." In its response filed January 24, 1992, the State answers that non-emergency operations of State government were suspended by the Governor due to his lack of legal authority to continue -1- non-emergency State government operations. The State also answers that its actions were authorized by the collective bargaining agreements, that the Association waived its right to bargain over the suspension of non-emergency operations, that the Association made no request or demand to bargain over the suspension of non-emergency State operations. The State's response includes a memorandum of agreement between the parties in which the Association agrees "not to seek monetary damages of any kind or nature, . . . waive[s] any claim for a monetary remedy and . . . waive[s] the right to enforce any monetary damages awarded" for any claim arising out of the shutdown of State government in July 1991, "in any forum" including the Board. On January 24, 1992, the State filed a Motion to Dismiss and Incorporated Memorandum. The State's motion complains of fatal lack of specificity and failure to state a claim of violation of 26 M.R.S.A. 979-C(1)(C). Neither party requests the award of attorney's fees or costs. On February 5, 1992, the Association filed an Amended Complaint which alleges the shutdown was "deliberately planned and implemented by the [State] and its allies in the Legislature, through the mechanism of a refusal to enact and sign a State budget, as an attempt to force the elected majority in the Legislature to accept a legislative compromise on a separate bill relating to workers' compensation." The Amended Complaint also alleges that the shutdown denied employees employment rights and benefits "for the purpose of pressuring a third party to take actions that party was not lawfully obligated to take." The Association's amended complaint avers that the State's intent to suspend the collective bargaining agreements is evidenced by its: failing to follow contractual procedures for reduction in force and the designation of essential and non-essential employees; failing to maintain operation of the Employee Assistance Program, the Bureau of Employee Relations, the Maine Labor Relations Board and the Maine Human Rights Commission; recalling employees -2- without observing contractual procedures; failing to pay vacation, sick and bereavement benefits during the shutdown; calling in employees who were on sick leave; requiring employees to stand by without pay; and having employees who were called in perform the work of employees who were not called in. The Amendment asks for a cease and desist order and is accompanied by a Memorandum in Opposition to the Motion to Dismiss. On February 19, 1992, the State filed an Objection to the Motion to Amend and a Response to the Amended Complaint. On February 28, 1992, a work session was scheduled to assist the parties in stipulating a factual record. On March 5, 1992, the Executive Director granted the motion to amend and dismissed the allegation of violation of 26 M.R.S.A. 979-C(1)(C) (1988). On January 29, 1992, the Executive Director directed the Association to explain its legal theory of how the alleged "secondary lockout" constitutes a violation of the SELRA. In response, on March 30, 1992, the Association submitted a memorandum of law which alleges that: By the end of June, agreement was reached on virtually all elements of the budget that was finally enacted on July 16. The Governor and his allies in the Legislature committed themselves publicly, however, to closing State government unless and until the Legislature accepted and enacted their proposed changes in the workers' compensation system [which allegedly included 'dramatic cuts in benefits, as well as procedural changes strengthening the insurers ability to defend against workers' compensation claims']," "linking the issue of the budget to workers' compensation." The parties' best efforts to stipulate a record in this case proved at length unavailing. A prehearing conference was scheduled for Friday, February 26, 1993, and a meeting in which to attempt to reach a stipulated record was scheduled for February 22, 1993. A complete stipulation was reached on May 10, 1993. The prehearing conference and evidentiary hearing were deferred and a briefing schedule was agreed to by the parties. -3- Pursuant to the briefing schedule, as amended by the parties, the last brief was received by the Board on September 3, 1993. A Board panel comprised of Chair Peter T. Dawson, Employee Representative George W. Lambertson and Employer Representative Howard Reiche, Jr., deliberated the case on October 1 and December 17, 1993. The Association is represented in this matter by Attorney Timothy L. Belcher. The State is represented by Chief Counsel Julie M. Armstrong and Counsel Leslie D. Bloom. JURISDICTION The Board has jurisdiction over this matter pursuant to 26 M.R.S.A. 979-H (1988 & Supp. 1992). The complaint alleges interference, restraint or coercion in violation of 26 M.R.S.A. 979-C(1)(A) (1988), and alleges a violation of the obligation to bargain in good faith prescribed in 26 M.R.S.A. 979-D(1)(E) (1988), which is specifically proscribed by 26 M.R.S.A. 979-C(1)(E) (1988). FINDINGS OF FACT The facts upon which this case is resolved are largely the product of the parties' stipulations. The stipulations are set forth below in their entirety. Findings of fact made from and set forth herein as excerpts of exhibits referred to in the parties' stipulation are included in brackets at appropriate locations within the stipulations. Stipulations 1. The Maine State Employees Association, SEIU Local 1989 (herein "MSEA") is an incorporated labor organization with offices in Augusta, Maine, and is the certified bargaining agent, pursuant to 26 M.R.S.A. 979, et seq., for all employees of the State of Maine working in the Administrative Services; Professional and Technical Services; Law Enforcement Services; Operations, Maintenance and Support Services; and Supervisory -4- Services bargaining units. 2. The State of Maine is a public employer under 26 M.R.S.A. 979-A(5), and is represented for collective bargaining purposes by the Governor, and by his designee, the Bureau of Employee Relations. 3. On September 5, 1989, MSEA and the State of Maine executed collective bargaining agreements (referred to in these stipulations as "MSEA agreements" and attached as exhibits), effective until June 30, 1992, specifying the terms and conditions of employment of all employees in the Administrative Services (Exhibit 1), Professional and Technical Services (Exhibit 2), Law Enforcement Services (Exhibit 3), Operations, Maintenance and Support Services (Exhibit 4) and Supervisory Services (Exhibit 5) bargaining units. 4. Beginning in early 1990, the State of Maine suffered chronic shortages in revenue, leading the State to implement a series of measures designed to cure revenue shortfalls in the 1989 to 1991 biennial budget. 5. During the winter and spring of 1991, the State required that its employees take three separate layoffs, each lasting one day, and shut down all services deemed at the time to be "non- essential" on May 10 and May 24, 1991. 6. During the spring of 1991, the State also implemented a lag payroll plan for all State employees. 7. Governor McKernan submitted a budget plan for the 1991- 1993 biennium on or about January 14, 1991. 8. At the beginning of the legislative session, Governor McKernan submitted proposed legislation designed to reduce the costs of the workers' compensation system. -5- 9. As early as May 21, 1991, Governor McKernan stated publicly that his acceptance of $300 million in tax increases was contingent upon the Legislature's acceptance of workers' compensation reforms which would result in 35% savings to employers in premium payments. 10. Prior to July 1, 1991, the Governor stated publicly that the Republican members of the Legislature would not enact a budget with $300 million in tax increases unless the Legislature accepted workers' compensation reform resulting in 35% savings to employers in premium payments. The Governor also stated that if such a budget was passed he would veto it absent legislative adoption of the workers' compensation reforms. 11. On June 28, 1991, Governor McKernan held a press conference, reading the statement attached as Exhibit 6. [Exhibit 6 states: REMARKS OF GOVERNOR JOHN R. McKERNAN, JR. NEWS CONFERENCE JUNE 28, 1991 Less than 72 hours from now, at midnight Sunday, the State begins its new fiscal year. If, for whatever reason, there has been no State budget approved by the Legislature and signed by me at that time, I will be forced to take the unprecedented step of ordering only emergency services be provided by State government. It is my sincere hope that we can overcome the obstacles and avoid a closedown. But in the event of an impasse, I will have no choice under the State Constitution but to authorize only those services which relate directly to ensuring the health and safety of Maine citizens and protect property from substantial damage. My authority under the State Constitution to operate State government is extremely limited. My Legal Counsel has researched this extensively and has consulted with the Attorney General's Office in defining the extent of my Executive emergency powers both in statute and under the State Constitution. Essentially, the lack of an approved budget means that State government cannot legally authorize spending. But the Constitution does require that I exercise my authority to ensure that the health and safety of Maine citizens be protected. My Administration will use a very strict interpretation of the Constitution and emergency statutes in operating State government during this period. The handouts attempt to define which emergency personnel would be required to work in the event of a closedown, and address key questions. Clearly, the State Police, prison guards, and staff at our Mental Health Institutions fall into this category, as well as some other personnel. The various agencies are, this afternoon, notifying the approximately 2,000 or so emergency personnel who would be -6- expected to work. And it is my intention that any budget agreement provide that emergency personnel be paid for their work. They would be not credited with a future day off as in the prior shutdowns. There's no question a closedown will create confusion not only in the State workforce but with the taxpaying public. Hopefully, this briefing will help avoid some of that while in no way indicating my belief that a closedown is either imminent or a preferred option. We have, however, a very real obligation to prepare and describe our plans in the event such action becomes necessary. Now let me take questions first about the closedown, and then move onto other topics.] 12. On June 28, 1991, the Governor issued Exhibit 7 to all commissioners and agency heads. [Exhibit 7 states: INTER-DEPARTMENTAL MEMORANDUM EXECUTIVE DEPARTMENT Office of the Governor June 28, 1991 TO: Commissioners and Agency Heads FROM: John R. McKernan, Jr., Governor SUBJECT: Procedures for the Eventuality of a Closedown of State Government on July 1, 1991 ******************************************************* At this writing on Friday, June 28, 1991, this State Government does not have an approved budget for the fiscal biennium that starts next Monday. Should no budget be approved before Monday, I shall implement a closedown of State Government. No State employees, except those determined to provide emergency services, will work until a budget is passed and the closedown ends. In order to ensure that a closedown is communicated to your employees, you must take the following actions today: 1. Inform all employees of the situation and the possibility of a closedown next Monday, July 1. 2. Directly notify those emergency employees, and make clear when you are requiring them to work. 3. Notify all non-emergency employees that they are to check local radio stations early on Monday morning before coming to work. The radio stations will report whether employees are to report for work or not report for work. Make clear to employees that it is their responsibility to learn whether they are to report to work. Attached are some questions and answers regarding the implementation of a closedown. Please distribute these as widely as possible today. JRMcK:mg Attachments] 13. On June 28, 1991, all State employees were issued -7- Exhibit 8, and were instructed to comply with the directives contained therein. [Exhibit 8 states: COMMON QUESTIONS ABOUT A STATE GOVERNMENT CLOSEDOWN If a budget for the fiscal year beginning on Monday, July 1 is not passed prior to Monday, all non-emergency State services must be closed down. This will affect all State employees. It is important that all State employees understand why this is necessary and how they will be affected. Every attempt has been made to make these common questions about a State Government closedown as comprehensive and accurate as possible. There is a possibility, however, that legislative action could be taken to alter or modify some of the information presented here. If this occurs, updated information will be distributed as soon as possible. What does a State Government closedown mean? A State Government closedown means that all State employees and State facilities that are not determined to provide emergency services will not work and will be closed. Which employees are emergency employees: Emergency employees are employees required to meet a civil emergency, as determined by the Governor's Office. Can the definition of emergency change from day to day? The definition of emergency employees is not expected to change, but from day to day, the staffing levels of emergency employees may change. For example, minimal staffing of emergency employees may be adequate one day, but additional numbers of emergency employees may be required another day. How will emergency employees be notified? Agencies will identify emergency employees and will directly notify every employee who is emergency. Is there an emergency that could occur which would make a job an emergency service? Yes, but this is not likely. Why does State Government need to close down? The closedown is necessary because there is no approved budget authorizing the expenditure of funds. How long will a closedown last? The closedown will be extended on a day to day basis until a budget is approved. Does the Governor have the right to order employees to work? Yes, through his executive emergency powers, the Governor can declare certain employees to be emergency employees and can order them to work. Can an employee offer his work to someone else? -8- No. Can emergency employees who are ordered to work but do not show up be disciplined? Can non-emergency employees who show up to work be disciplined? Yes, in both instances employees would be subject to discipline. Will employees who work be paid? Yes, to the best of our knowledge. Should State employees whose positions do not rely on state funds report to work? No. the closedown applies to all State employees except for emergency services, regardless of funding source. When will state employees know if they should report to work? How will they be notified? If a settlement occurs at the last minute (i.e., at 3:00 a.m. on Monday morning), how will employees know? Employees will be notified by the end of the day Friday if they are emergency employees and are to report to work on Monday. For non-emergency employees, the notification process will be the same as that used for storm days. Non- emergency employees are responsible to listen to a local radio station to learn whether they are to report to work at shifts beginning at 7:00 a.m. or later on Monday. The announcement will be provided to radio stations as early Monday as possible, but no later than 6:00 a.m. The announcement will inform employees whether they are to report to work or not report to work. Should the closedown last beyond Monday, employees will receive information by listening to the radio. Will employees who have previously scheduled vacation be paid for vacation days during the closedown? Employees on vacation or sick leave will not be paid for closedown. Can employees use vacation time to be paid for this closedown day? No. Will the closedown days be included toward any required furlough days? If at all possible, it is intended to count closedown days toward any furlough days that might be required. How does the closedown differ from the two shutdown days previously scheduled, or from furlough days? The shutdown and furlough days were planned to reduce costs to met [sic] a revenue shortfall for an already- approved budget. The closedown is necessary for another reason: the lack of an approved budget. Another difference is that there will be no deferred payment arrangement for employees; those employees who are not required to work during the closedown will not be paid. Finally, while federally-funded employees were not affected by shutdown days, all employees under all -9- funding sources, except for emergency employees, will be affected by the closedown. If State Government closes down, will it affect employee retirement benefits, health benefits, or insurance? Because employees' annual compensation for 1991 will be reduced according to the length of the closedown, retirement benefits will be affected for those employees using this year in the determination of their average annual compensation. Neither health benefits nor insurance will be affected. Will this time off without pay count toward overtime? Yes. Any time off without pay that must be taken next week will be treated as time worked when computing overtime. Can employees volunteer to help? No. State employees may not volunteer to work. Can employees use State facilities, such as buildings, lights, telephones, computers or cars? No, unless authorized by the appointing authority. What happens to meetings or activities that are scheduled during the closedown, including activities that were advertised in advance, such as hearings or bid openings? All trips, meetings and other activities are cancelled during the closedown. Bid openings, hearings, and other such activities will need to be rescheduled. Agencies should attempt on Friday to notify people who may be affected to alert them to the circumstances. Pay checks have already been cut for Monday. Will employees be paid on Monday? Checks cannot be delivered until a budget has been passed. When a budget is passed, will employees receive their paychecks right away? Once a budget is passed, everything will be done to deliver pay checks to employees as soon as possible. Direct deposit checks, however, cannot be deposited to bank accounts on Monday. These checks must be processed through a regional distribution service. If certain deadlines cannot be met, deposits to accounts are delayed. The deadline that must have been met to deposit checks into bank accounts on Monday has already gone by. All employees who have direct deposit will be notified of the date the check will be deposited into their accounts as soon as this date is known. Will pay checks due next Monday, July 8th, be delayed? Again, checks cannot be delivered until a budget has passed. If a budget is passed next week, checks will be delivered on time. The passage of a budget very late in the week, however, may delay direct deposit checks for a day or two. Employees will be kept informed of any delays that may be necessary. If the closedown extends to Wednesday, July 3, will employees receive holiday pay for July 4? -10- Our best information at this time is that you will be paid for the Fourth of July holiday only if a budget is approved before that day. Legislative action could change this. Should a sign be posted on the front of state buildings in the event of a closedown? What should it say? Yes, it would be appropriate to inform the public that your office is closed for the day. Does the closedown affect all branches of government? Yes.] 14. Democratic leaders in the House and Senate spoke with Governor McKernan repeatedly both before and after July 1, 1991, and proposed various measures to extend the 1989-1991 budget pending resolution of whatever disputes were blocking enactment of the biennial budget, but did not propose such measures after July 8, 1991. 15. Prior to July 7, Governor McKernan rejected proposals for a temporary budget and insisted to both Senate President Pray and Speaker of the House Martin that unless the Legislature passed a workers' compensation package that produced savings of 35% as determined by actuaries, McKernan would veto any budget bill presented to him. 16. The Legislature did not approve the Governor's proposed reforms of the Workers' Compensation Act prior to July 1, 1991. Except for emergency services the Governor shut down State government on July 1, 1991. 17. Governor McKernan received legal advice prior to and after July 1, 1991, from the Attorney General, including the letter marked as Exhibit 25, as well as his own counsel, that without a budget he would be constitutionally prohibited from authorizing non-emergency state services. 18. Governor McKernan took the position that "in the event of an impasse, I will have no choice under the state Constitution but to authorize only those services which relate directly to ensuring the health and safety of Maine citizens and protecting -11- property from substantial damage." Bangor Daily News, June 29, 1991. 19. The determination of emergency services to be provided by State government was made by the Executive branch in accordance with advice from the Attorney General and was subject to review by the Attorney General. [Although the July 1, 3, 6, 11, 12, 15 and 16 Civil Preparedness Emergency Orders all state that "[a] record of those employees requested to report to work shall be maintained for public inspection in accordance with 1 M.R.S.A. 401 et. seq. at the Bureau of Human Resources," no such list was introduced into the record. The parties' contracts provide no method for determining which employees or job classifications shall be considered "essential" or "emergency" employees or job classifications.] 20. On July 1, 1991, Governor John McKernan vetoed a budget bill approved by the Legislature and wrote to the Legislature as follows: To the Honorable Members of the 115th Legislature. I am returning, without my signature or approval, H.P. 653, L.D. 927 "An Act Making Unified Appropriations and Allocations for the Expenditure of State Government General Funds and Changing Certain Provisions of the Law Necessary for the Proper Operations of State Government for the Fiscal Year Ending June 30, 1992 and June 30, 1993. While I have been hopeful that this Legislature would be able to reach agreement on a responsible spending plan for the upcoming biennium that could be funded from available resources and a maximum increase of $150,000,000 per year in new taxes, I have been presented with a one-year budget that would not become effective for 90 days after your adjournment and that relies on a full compliment of increased taxes with no authority to continue the operations of State government. Given the lack of spending authority implicit in this budget and its unbalanced condition for the upcoming fiscal year - on both the revenue and spending sides of the state budget - I find it an incomprehensible response to our obligation to adopt a balanced budget. Given the magnitude of taxes that would be raised under this proposal, and the implied delay in the effective date of such tax increases, I believe we have a shared responsibility to demonstrate a concern for the drain that such taxes would inevitably have on the Maine economy. Without passing a responsible package of workers' compensation reforms in order to offset the negative effect of tax increases, we lose our opportunity to stimulate and create new and expanded job opportunities within our business sector. In view of the fact that the Legislature has yet to present me a favorable workers' compensation reform proposal, I must reject this ill conceived and unbalanced budget proposal as being -12- both unworkable and indefensible. It is an entirely inadequate proposal for addressing the State's financial needs for the fiscal year that starts today. I believe this legislation is ill advised and incomplete, and fails to balance the needs of state government from the critical demand for reforms in our expensive and litigious workers' compensation system. I, therefore, respectfully request that you reject this legislation and sustain my veto. Thank you for your consideration. Sincerely, John R. McKernan, Jr. Governor L.D. 927 was not emergency legislation and would not have been effective until 90 days after adjournment of the Legislature. 21. On July 1, 1991, Governor McKernan issued a Proclamation attached hereto as Exhibit 9, [Exhibit 9 states: State of Maine Proclamation 1991-92 WHEREAS, 5 M.R.S.A. 1501 requires that the 1992-93 fiscal biennium commence on July 1, 1991; and WHEREAS, a budget document contemplated by 5 M.R.S.A. 1662 et. seq. that would appropriate and allocate funds sufficient to operate State Government during that biennium has not become law by July 1, 1991; and WHEREAS, this event substantially affects the means by which the Executive Branch may faithfully execute the laws in accordance with Article V, Part First, Section 12; and WHEREAS, the failure to execute faithfully those laws that serve the government's most fundamental purpose -- to provide protection against the risk of harm to persons and their property -- poses a direct and imminent risk of harm to those persons and their property; and WHEREAS, this risk gives rise to a civil emergency within the meaning of the Maine Civil Emergency Preparedness Act, 37-B M.R.S.A. 701 et. seq; and WHEREAS, that Act empowers the Governor, upon declaration of a civil emergency, to minimize and repair injury and damage resulting from such an emergency; NOW, THEREFORE, I, JOHN R. McKERNAN, JR., Governor of the State of Maine, by virtue of the authority vested in me by the Constitution and Laws of the State of Maine, declare a state of emergency in the State, and do hereby deploy those forces and resources necessary and appropriate to execute those laws that minimize the risk of harm to persons and their property. In testimony whereof, I have caused the Great Seal of the State to be hereunto affixed GIVEN under my hand at Augusta this first day of July in the Year of our Lord One Thousand Nine Hundred and Ninety-One. -13- JOHN R. McKERNAN, JR. Governor G. William Diamond Secretary of State] as well as Executive Order No. 1 FY 91/92, attached as Exhibit 10. [Exhibit 10 states: Executive Order 91/92 OFFICE OF No. 1 FY 92/93 THE GOVERNOR Date July 1, 1991 CIVIL PREPAREDNESS EMERGENCY ORDER OF JULY 1, 1991 WHEREAS, 5 M.R.S.A. 1501 requires that the 1992-93 [sic] fiscal biennium commence on July 1, 1991; and WHEREAS, a budget document contemplated by 5 M.R.S.A. 1662 et. seq. that would appropriate and allocate funds sufficient to operate State Government during that biennium has not become law by July 1, 1991; and WHEREAS, this event substantially affects the means by which the Executive Branch may faithfully execute the laws in accordance with Article V, Part First, Section 12; and WHEREAS, the failure to execute faithfully those laws that serve the government's most fundamental purpose -- to provide protection against the risk of harm to persons and their property -- poses a direct and imminent risk of harm to those persons and their property; and WHEREAS, this risk gives rise to a civil emergency within the meaning of the Maine Civil Emergency Preparedness Act, 37-B M.R.S.A. 701 et. seq; and WHEREAS, that Act empowers the Governor, upon declaration of a civil emergency, to minimize and repair injury and damage resulting from such an emergency; and WHEREAS, by virtue of the authority vested in my by the Constitution and Laws of the State of Maine, I declared a state of emergency in this state on July 1, 1991, and thereby deployed those forces and resources necessary and appropriate to execute those laws that minimize the risk of harm to persons and their property; NOW, THEREFORE, I, JOHN R. McKERNAN, JR., Governor of the State of Maine, order the continuous provision of state services through the continuous employment of only those State employees hereafter identified. Executive Order 1 FY 91/92 July 1, 1991 Page 2 Standard for Determining the Workforce and its Functions Only those persons employed by the State whose duties and functions minimize the risk of direct and imminent injury to persons, or minimize the risk of direct, imminent and substantial harm to property, or that serve to repair any such injury to -14- persons or harm to property, or are essential to completing that portion of the law-making process that will relieve the state of emergency, or whose functions are necessary or appropriate to meet additional needs covered by the Maine Civil Emergency Preparedness Act, shall be allowed to report to work and perform their assigned tasks during the duration of this Order. Procedure for Determining the Workforce and its Functions The commissioner, director or head of every department, office or agency, as well as the Treasurer, Secretary of State, State Auditor and Attorney General (hereafter the "Determining Authority"), shall determine, in accordance with the above standard, which employees shall work and which services shall be provided during the duration of this Order. The Determining Authority shall, in accordance with the above standard, report the specific position(s) and the specific function(s) to the Office of the Governor. The Office of the Governor shall review and approve or disapprove those determinations. In addition, the Determining Authority shall immediately report to the Office of the Governor any proposed changes to its determinations and the Office of the Governor shall promptly review and approve or disapprove the same. Any employee not so approved shall not attempt to perform his or her work during the duration of this Order. Record for Inspection A record of those employees required to report to work shall be maintained for public inspection in accordance with 1 M.R.S.A. 401 et. seq. at the Bureau of Human Resources. Effective Date and Duration of this Order This order shall become effective at 2:30 a.m. on July 1, 1991, and remain in effect until the state of emergency is terminated by Executive Proclamation, or until 12:00 a.m. on July 3, 1991, whichever is earlier. If the state of emergency still exists by 12:00 a.m. on July 3, 1991, this Order shall be reviewed and revised accordingly. __________________________ John R. McKernan, Jr. Governor] [The Executive Orders mentioned in this and in stipulation paragraphs 22, 24, 25, 29, 31 and 32 are substantially identical, but for their effective and issuance dates.] 22. On July 3, 1991, Governor McKernan issued Executive Order No. 2 FY 91/92, attached as Exh. 11. 23. At least until July 5, 1991, a $32 million hole existed in the proposed budget as a result of the Governor's refusal to support video gambling. This $32 million revenue from video gambling was included in L.D. 927, which was vetoed by Governor McKernan on July 1, 1991. 24. On July 6, 1991, Governor McKernan issued Executive -15- Order No. 3 FY 91/92, attached as Exhibit 12. 25. During the weekend of July 6 and 7, the Governor and the legislative leadership reached an agreement designed to reopen State Government for three days to allow continued negotiations over remaining disputes concerning reforms of the Workers' Compensation Act. 26. Pursuant to the above-described agreement, the Legislature approved and the Governor signed an emergency budget bill, P.L. 1991 ch. 528 (effective on July 8, 1991), attached hereto as Exhibit 13, designed to provide for the operation of State Government for three days to allow continued negotiations and legislative debate over remaining unresolved issues involved in the reform of the Maine Workers' Compensation system. 27. P.L. 1991, ch. 528 was repealed by its very terms pursuant to RRR on July 11, 1991. 28. On July 11, 1991, Governor McKernan issued a Proclamation attached hereto as Exhibit 14, as well as Executive Order No. 4 FY 91/92, attached as Exhibit 15. [The July 11, 1991, Proclamation of emergency is identical to that of July 1, 1991, except that it erroneously refers to a requirement that the 1992-93 fiscal biennium commence on July 1, and contains a different date of execution.] 29. On July 12, 1991, Governor McKernan issued Executive Order No. 5 FY 91/92, attached as Exhibit 16. 30. During the period following July 8, 1991, various discussions were held between the Governor and the Democratic legislative leadership concerning the resolution of this crisis. A number of possible courses of action were discussed. The Governor suggested some scenarios that would have included the enactment of an interim budget. No formal exchange of specific proposals was made by either party during the period after -16- July 8. The Democratic leadership was never asked to provide a unified response to any such proposal, and did not in fact offer any such response. The Governor did not submit any legislation containing an interim budget to the legislature during that period. 31. On July 15, 1991, Governor McKernan issued Executive Order No. 6 FY 91/92, attached as Exhibit 17. 32. On July 16, 1991, Governor McKernan issued Executive Order No. 7 FY 91/92, attached as Exhibit 18. 33. On July 17, 1991, Governor McKernan signed as emergency legislation a State budget bill, P.L. 1991, ch. 591 (effective immediately retroactive to July 1, 1991) for the biennium that in other respects was substantially the same as Chapter 528. 34. Prior to July 17, 1991, the Legislature had not approved an emergency budget bill for the biennium except for P.L. 1991, ch. 528 which expired on July 11, 1991, by its own terms. 35. On July 16, 1991, the Legislature approved L.D. 1979 which was substantially identical to P.L. 1991, ch. 528, enacted for a three-day period the preceding week. Also on July 16, 1991, legislative leadership agreed to schedule a vote the following day on a package of workers' compensation reforms largely consistent with the proposals advanced by the Governor. 36. Early in the morning of July 17, 1991, the Governor signed Chapter 591, and issued orders to reopen State Government that morning. 37. On July 19, 1991, the MSEA filed a grievance alleging that the shutdown violated the collective bargaining agreements for all bargaining units. In addition, several grievances were filed alleging specific violations of the contract occurring during that period. The July 19, 1991, grievance appealing the -17- shutdown as a whole as well as two other specific grievances were not filed to arbitration within the time limits contained in the collective bargaining agreements. The July 1991 grievance and the November 14, 1991, response by Kenneth A. Walo to the three grievances which were not appealed are attached as Exhibit 26. 38. Prior to August 4, 1991, the Maine Sunday Telegram interviewed Governor McKernan. 39. Transcription of statements made by Governor McKernan during the course of the above-described interview was published by the Maine Sunday Telegram on August 8, 1991, and is attached to these stipulations as Exhibit 19. 40. State employees are paid on alternate weeks, according to two pay cycles, referred to as Cycle A and Cycle B. 41. The pay schedule followed by the State during the months of June and July of 1991 is described on Exhibit 20, parts of which are summarized as follows: Period worked Date paid: Cycle A 6/2 to 6/15 7/1 6/16 to 6/29 7/16 6/30 to 7/13 7/30 7/14 to 7/27 8/13 Cycle B 6/9 to 6/22 7/8 6/23 to 7/6 7/23 7/7 to 7/20 8/6 Holiday pay for July 4, 1991, was received by employees on July 23 and 30, 1991, and was unaffected by the shutdown. 42. Pay checks due to Cycle A employees on July 1, 1991, were withheld until on or after July 3, 1991. -18- 43. During the shutdown the State continued to receive revenues falling due during that period. 44. Certain employees of the Department of Finance were designated essential during the shutdown, and were directed to open mail containing revenues and to deposit said revenue checks in the bank. 45. Adequate funds existed in accounts owned by the State of Maine sufficient to pay all costs that would have been incurred during the period from July 1 to July 18 had the shutdown in State services not occurred. 46. Adequate funds exists [sic] for federally-funded jobs and approval had been granted by the federal government to pay those funds for work performed during the period from July 1 to July 17, 1991. 47. The State and MSEA were not negotiating any collective bargaining agreement at the time of the shutdown. 48. From July 1 to July 16, State agencies were directed to designate those employees who would be ordered to work as "essential employees." 49. The identical statements contained in Executive Orders 1 FY 91/92 (Exhibit 10), 3 FY 91/92 (Exhibit 12), 4 FY 91/92 (Exhibit 14), 5 FY 91/92 (Exhibit 15), 6 FY 91/92 (Exhibit 16), and 7 FY 91/92 (Exhibit 17), are the only consistently applied written standards governing the designation of which employees could be determined to be essential during the shutdown. 50. Certain documents were prepared during the course of the shutdown summarizing the designation of essential and non- essential employees throughout State government. Those documents are attached as Exhibits 20(a) to 20(d). -19- 51. No records were maintained or reports made detailing which positions were deemed essential by any department prior to July 4, 1991. 52. Reports were prepared by certain departments for the shutdown days occurring after July 4, 1991. A complete set of reports is attached as follows as Exhibits 21a through 21q: a: Administration b: Agriculture c: Attorney General d: Audit e: Conservation f: Corrections g: Defense and Veterans Services h: Economic and Community Development i: Environmental Protection j: Finance k: Human Services l: Inland Fisheries and Wildlife m: Labor n: Marine Resources o: Mental Health and Mental Retardation p: Public Safety q: Retirement System 53. The designation of which employees were "essential" varied from work place to work place, and from time to time during the periods the State was without a budget. 54. The Employee Assistance Program, operated by the State to provide counselling and referrals to employees needing assistance for a variety of emotional, financial and other personal and familial crises, was shut down from July 1 through 7 and from July 11 through 16, and its employees were directed to not work during the shutdown. -20- 55. The employees of the Maine Labor Relations Board were directed to not work during the shutdown. 56. With the exception of some work directly related to the shutdown, the employees of the Bureau of Employee Relations were directed to not work during the shutdown. 57. With the exceptions cited above in paragraph 56, employees of the Bureau of Employee Relations were determined to be non-essential and were not allowed to report to work, to present cases in arbitrations scheduled during the shutdown period, to prepare arbitrations scheduled shortly thereafter, or to hear grievances. 58. Employees of the Maine Human Rights Commission were not designated as essential and were directed to not report to work during the shutdown period and thus were unable to prepare or to litigate cases arising during or after the shutdown period. 59. Evan Plourde was designated by his employer, the Bureau of Veteran Services, as an essential employee needed to prepare for federal administrative law hearings. 60. Different employees were designated as "essential" within the Department of Corrections on different days. 61. The State followed a consistent practice of paying employees only for time actually worked during the shutdown period. 62. Pursuant to the above-described practice, the State refused to honor any request for sick time, vacation pay, bereavement leave, stand-by pay, or any other contractual benefit other than pay for time actually worked. 63. Employees who were sick, injured, recovering from surgery, or otherwise unable to work due to a condition or -21- circumstance that would have entitled them to use sick time in the absence of a State shutdown, were not allowed to use sick time during the periods from July 1 through 5 and July 10 and 16. 64. Essential employees who were sick, injured, recovering from surgery, or otherwise unable to work due to a condition or circumstance that would have entitled them to use sick time in the absence of a State shutdown, were not allowed to use sick time during the periods from July 1 through 5 and July 10 through 16, and were directed, instead, to either come to work as essential, or to stay home without pay. 65. No employees received vacation pay for time during the shutdown of State government including employees who were on vacation at the time the shutdown began. 66. No contractual notice of any layoff was provided to any employee who was directed not to work during the shutdown. 67. No other contractual layoff or recall procedure was followed during the shutdown. 68. Department of Transportation employees were assigned during the shutdown period to clean up rest areas along the highways but such assignments were made without calling in the entire crew and were not made on the basis of seniority or any other contractual procedure determining the order in which employees would be called in. 69. Any employees applying for bereavement pay and leave during the shutdown period was/would have been denied such. 70. Roland Curtis, an employee of the Department of Labor in Presque Isle, was on sick leave during the shutdown but was directed during the shutdown to either come to work as an essential, or to stay home without pay. -22- 71. Some private contractors performing services for the State continued to work during the shutdown, and some performed work that was billed to the State on an hourly basis. 72. With the exception of the DOT, contractors were generally not directed to cease working on projects during the shutdown, including contractors working on an hourly basis, nor were contracts designated "essential" and "non-essential." 73. Employees of the Maine Publicity Bureau, an independent contractor for the State of Maine, were directed to work during the shutdown providing information to tourists at information booths in Kittery, Yarmouth and Hampden. 74. Some contractors for the Department of Transportation were allowed to continue work during the first three days of the shutdown, and State inspectors assigned to those projects were designated as essential. 75. After the first few days of the shutdown, State inspectors were designated non-essential, and were directed to stop working. 76. After the State inspectors were directed to stop working, most DOT contractors were directed to stop working. 77. Some DOT contractors continued to work during the shutdown without the required inspectors. 78. Because of the shutdown of construction operations, the State was required to pay additional costs caused by the delay in the completion of the assigned construction project. 79. Race tracks were allowed to operate in the State of Maine during the shutdown period in the absence of State veterinarians normally assigned to such businesses. 80. Businesses selling cigarettes were allowed to put stamps -23- on cigarettes during the shutdown period. 81. The State made other payments on other obligations during the shutdown, including payments for workers' compensation benefits owed to injured State employees or their physicians, and other payments listed on Exhibits 22a through 22d, documents prepared in relation to payroll and other payments made by the State during the shutdown or immediately thereafter. 82. On July 1, 1991, the Attorney General informed the Governor that pursuant to federal law AFDC (Aid to Families with Dependent Children) payments should be made. [(See Exhibit 24)]1 83. After receiving the above-described directive from the Attorney General, the Governor directed that those functions be designated "essential" during the shutdown. 84. The State incurred other financial obligations that were not suspended during the shutdown, including items such as phone and electricity. 85. On August 23, 1991, MSEA and the State of Maine executed an agreement attached to this stipulation as Exhibit 23, which agreement was subsequently ratified by a vote of the MSEA membership. [In this agreement the Association agrees not to "seek monetary damages of any kind or nature . . . waives any claim for a monetary remedy and . . . waives the right to enforce any monetary damages awarded" in any action "aris[ing] out of the shutdown of state government . . . in July, 1991."] ___________________________________ 1The parties amended their stipulations by phone, on September 13 and 14, 1993, to include this exhibit reference. -24- Official Notice of Facts The Board takes official notice of the following facts:2 On July 8, 1991, the Bureau of Human Resources issued Human Resources Memorandum 20-91 "to provide agencies with information and instructions concerning employment actions to be taken as a result of the closure of State Government during the week of July 1 and the FY 91/92 budget." Attached to Memo 20-91, inter alia, is a "Memorandum of Agreement" between the State and the Association which provides, in pertinent part, that: All employees who would have been eligible for holiday pay for July 4 but for the shutdown of State government will receive holiday pay for July 4. Those not otherwise eligible will not receive holiday pay. . . . Employees will not receive payment for any lost time during the shutdown but will receive payment only for time actually worked or except for holiday pay as provided [above]. . . . . Under no circumstances shall this be interpreted to limit employees' rights to challenge the effects of the July 1-July 7 closure of State government. Memo 20-91 also permits employees the option of ameliorating the loss of pay attributable to the July 1-7 shutdown by spreading days of leave without pay over separate future biweekly payroll periods. On July 17, 1991, the Bureau of Human Resources issued Human Resources Memorandum 21-91 "to provide agencies with information ___________________________________ 2On December 1 and 2, 1993, the State and the MSEA telephonically assented to the Board's official notice of Bureau of Human Resources Memoranda 20-91 and 21-91 and their attachments. We are extremely disappointed that neither party in the first instance tendered these documents, which we find to be extremely material to resolution of issues in dispute in this case. -25- and instructions concerning employment actions to be taken as a result of the closure of State Government during the weeks of July 8 and July 15 and provide general instructions for payroll and HR processing for the immediate future." Attached to Memo 21-91 is, inter alia, a "Memorandum of agreement MSEA." That agreement provides, in pertinent part, that: Employees will not receive payment for any lost time during the shutdown but will receive payment only for time actually worked, except for holiday pay for the 4th of July. . . . . . . . Under no circumstances shall this be interpreted to limit employees' rights to challenge the effects of the July 1991, closures of state government. Memo 21-91 also permits employees the option of ameliorating the loss of pay attributable to the July 11-16 shutdown by spreading days of leave without pay over separate future biweekly payroll periods. On July 14, 1991, Governor McKernan signed as emergency legislation "An Act to Fund Collective Bargaining Agreements and Benefits for Certain Employees Excluded from Collective Bargaining," Private and Special Laws 1991, First Regular Session ch. 65 (effective July 14, 1991) which provides, in pertinent part, with respect to personal services funding of Association's represented employees, that the enactment: Provides funds necessary to fund the 3rd year of the State's current collective bargaining agreements made by the State and the Maine State Employees Association for the administrative services bargaining unit, the supervisory services bargaining unit, the professional and technical services bargaining unit, the law enforcement services bargaining unit and the operations, maintenance and support services bargaining unit and, -26- Provides for the deappropriation of funds from the salary plan from unfilled positions, attrition and other temporary or permanent reductions in the work force. In addition, the State and the Maine State Employees Association may, by August 1, 1991, agree to implement cost-savings measures. If no agreement is reached by August 1, 1991, the Governor may implement such cost-savings measures as are appropriate and necessary and permitted by the collective bargaining agreements referred to in this section. POSITIONS OF THE PARTIES The Association The Association contends that the "state was shut down in July of 1991 for two periods because the Governor and his Republican allies in the Legislature refused to enact a budget until the Democratic majority supported reform to the Workers' Compensation Act." The Association contends that although the "Governor took the position, based on advice from the Attorney General . . . that the lack of a budget required that the State cease all operations except for certain services deemed to relate directly to ensuring the health and safety of Maine citizens and protecting property from substantial damage," the "Governor himself precipitated the very crisis that allegedly justified his suspension of the laws." The Association argues that in shutting down state government "numerous specific provisions of the collective bargaining agreements were violated or ignored" resulting in a "repudiation of the entire collective bargaining relationship" by the State. The Association points out that by sending home its own contract administrators and the Maine Labor Relations Board's staff the State shut down its formal line of communication with the union and suspended the administration of SELRA. The Association alleges that the shutdown constituted an unlawful "secondary lockout." In this regard the Association states that the "Governor deliberately inflicted economic harm on State employees in order to pressure the Legislature to enact -27- [his workers' compensation reforms] that were totally unrelated to any collective bargaining demands." The Association alleges in conclusion that because the State "rejected its contractual obligations on a massive scale, eliminated its lines of formal communication with the union and suspended its enforcement and administration of the public sector collective bargaining laws, the rights of employees established under SELRA simply ceased to exist for the duration of the shutdown. The State The State contends that the actions of the Governor constitute neither interference with a protected right nor a refusal to bargain as alleged by the Association. The State contends that the Governor was without authority to operate other than "emergency" state services after June 30, 1991, because the Legislature had failed "to pass a state budget which would be [immediately] effective upon signature by the Governor." The State also argues that the Board has no jurisdiction over alleged contract violations, that no right protected by SELRA has been alleged or proven to have been violated, that the Board has no authority to address constitutional issues, that the Board may not assess the lawfulness of gubernatorial action other than under the SELRA and that even if such authority existed the Governor possessed the constitutional prerogative to refrain from signing any legislation. The State argues with respect to the Association's allegation of unlawful "secondary lockout" that the Association "does not allege, and the evidence does not support, a finding that the state closed government operations for the purpose of gaining any bargaining advantage" over the Association. DISCUSSION We do not possess the authority to address the constitutional issues which each of the parties has introduced -28- into this prohibited practice case. However, it is our considered opinion that though the parties have agreed that no monetary damages may lie for any finding of commission of the alleged violations, the parties in their future conduct should be informed of our view of the lawfulness of the State's actions under SELRA. We have considered the issues in this matter in light of the parties' arguments and stipulations, our findings of fact gleaned from their joint exhibits and matters officially noticed. As is more fully explained below, we conclude that the Legislature and not the Governor caused the complained-of near shutdowns (shutdowns) of state government, and that the layoff of employees by the Governor during the period July 1 through 7, 1991, was excused by exigent circumstances. However, as is also more fully explained below, we also conclude that the Governor violated the SELRA during the period July 11 through 16, 1991,3 when he refused or failed to apply the contractual layoff and recall provisions because the length of time involved was sufficient to take that shutdown out of the reach of the 3-day temporary layoff exception to the Seniority Article of the parties' agreements and because compliance with the contracts' layoff provisions by that time was no longer excused by exigent circumstances. Additionally, as is indicated in greater detail herein, we find that the parties had settled the issue of the payment of compensation other than for time actually worked for each shutdown period, prior to the first actual workday after each shutdown and well in advance of the dates on which any such compensation would ordinarily have been due to have been paid. Any violation in this regard is, therefore, not legally significant. ___________________________________ 3We accord no dispositive significance to the fact that the entire period of the second shutdown or layoff was accomplished via several periods covered by separate Executive Orders. -29- The Cause of the Shutdown We shall first address the causation issue. Hypothetically, if the Legislature had both approved a budget by simple majority in each legislative house and adjourned 90 days or more prior to the end of the fiscal year, the Governor, by refusing to sign the legislation, might be attributed with responsibility for lack of budgetary authority at the commencement of the following fiscal year. This is the case because legislation approved by simple majorities of each legislative house and subsequently signed in approval by the Governor ordinarily becomes effective ninety days after legislative adjournment. Me. Const. art. IV, pt. 3, 2 and 16. Accordingly, in the facts of this case no budgetary authority at fiscal year 1992 commencement would have existed even had the Governor signed the budget bill presented to him on July 1, 1991, because the budget would not have been effective until 90 days after the actual adjournment of the Legislature. In contrast, a budget passed by two-thirds majorities of both legislative houses and subsequently vetoed by the Governor may still become law if the veto is overridden upon resubmission, by two-thirds majorities of both legislative houses. Id. In such case the emergency legislation has legal effect on the date specified in the legislation, and may thereby be made immediately effective. It is conceivable, therefore, that the Legislature might have passed an emergency budget (by two-thirds majorities in each house) after the normal close of business on Friday and before its resumption on Monday, during the period June 28-30, 1991. Had it done so and had the Governor failed or refused to approve the budget, thereby frustrating a legislatively specified immediate implementation, the factual issue of whether the Governor had caused the near shutdown of state government on July 1, 1991, would be a closer one. Remaining to be resolved in any event, however, would be issues respecting the Governor's -30- exercise of constitutional prerogative regarding the approval of budgets, issues this Board is not empowered to address. See Gallant v. Maine Department of Public Safety, No. 92-32, slip op. at 13 (Me.L.R.B. Feb. 2, 1993). In the facts of this case we find that responsibility for the failure of budgetary authority for other than emergency operations of State government ultimately rested with the Legislature. There is no allegation that the Governor failed to submit or failed to support a budget request for full funding of the third year of the existing collective bargaining agreement. There is no allegation that the Governor, in warning of, explaining or executing the shutdown, ever attempted to extract a concession from the Association, or to diminish the stature of the Association as the collective bargaining agent. Secondary Boycott We find no merit in the Association's suggestion that the State's actions constitute an unlawful "secondary lockout"4 [sic]. "A lockout is the withholding of employment by an employer from his employees for the purpose of resisting their demands or gaining a concession from them." Fox Island Teachers Association v. MSAD No. 8 Board of Directors, No. 81-28, slip op. at 9, 9 NPER ME-18015 (Me.L.R.B. Apr. 22, 1981). Not every shutdown constitutes an unlawful lockout. See Windham School Committee v. Windham Educators Association, Nos. 87-14 and -15 (Me.L.R.B. Apr. 17, 1987), aff'd sub nom. Windham Educators' Association v. Windham School Committee, No. CV-87-153 (Me. Super. Ct., Ken. Cty., Sept. 30, 1987). Although, contrary to the contention of the State, negotiations need not be on-going ___________________________________ 4The novel concept of a "secondary lockout" is apparently an original contribution to labor relations by the Association. Neither party has cited to a case where the concept has previously been employed. -31- for a lockout to seek concessions as its aim, we think that to be unlawful any such concessionary aim must be either wages, hours or some other term or condition of employment. Moreover, the concession must be sought from an entity with whom the respondent has a collective bargaining relationship. In this case there is no allegation that a concession within or separate from negotiations5 was sought by the State from the Association. Additionally, it has not been alleged that the July, 1991, Memoranda in which the Association waives its entitlement to compensation for other than time actually worked were coerced by the continued shutdown. Closure of Specified Agencies We also find without merit the Association's claim that the State repudiated the parties' contracts by suspending the operation of the Maine Labor Relations Board (Board), the Maine Human Rights Commission, the State Employee Assistance Program and the Bureau of Employee Relations (BOER). Of these agencies, only the Board and the BOER possessed labor relations duties and the Association has not demonstrated a "preservation of life or property" mission for either agency sufficient upon which to base a conclusion that the Governor discriminatorily failed to operate them, while calling to work other employees whose duties impacted the preservation of life or property. Neither has the Association demonstrated that any labor-relations-related responsibility which either of these agencies possessed with respect to circumstances given rise to by the shutdown could not adequately be performed upon resumption of budgetary authority. ___________________________________ 5Neither party has suggested that either the lack of a budget at FY 92 commencement or later, or underfunding of the third year of the parties'contract constitutes rejection of cost items within the meaning of 26 M.R.S.A. 979-D(1)(E)(3) (1988). Additionally, neither party has sought to characterize any discussion prefatory to the July or August Memoranda of Agreement as mandatory or permissive negotiations. -32- Layoff and Recall Procedures Prior to the near shutdown at issue here, failure of budgetary authority for continued operation of state government was apparently unprecedented in Maine's history.6 The record does not indicate whether a contingency plan describing positions essential to the delivery of emergency state services existed prior to July 1, 1991. There is no evidence of which positions were deemed essential by any department prior to July 4, 1991. Although the record establishes that on June 28, 1991, the Governor held a press conference, issued operating instructions to agency heads and commissioners, and issued a set of directives in the form of "Common Questions About a State Government Closedown," there is no indication of the time of occurrence of these events, no indication of the time expended in composing and distributing the instructions or directives and no allegation or evidence of the estimated time required to implement the layoff procedures set forth in the contract. We conclude based on the facts before us that the lack of budgetary authority on July 1, 1991, created an emergency giving rise to exigent circumstances during the first shutdown period (July 1 through 7, 1991) sufficient to excuse the Governor's failure or refusal to apply the contractual layoff provisions from consequences under the ___________________________________ 6State shutdown for lack of budgetary authority was unprecedented. Shutdown as a cost-saving measure and operation with only essential or emergency services was not. The Association has not supplied facts upon which to base a comparison of the apparently uncontested "essential" or "emergency" designations made by the State during two one-day shutdowns which occurred in May of 1991, with those in this case which the Association has alleged to be arbitrary and capricious. Moreover, although the facts establish that certain state park employees along with the Recreation Supervisor and the Assistant Craftsroom Supervisor at the Bolduc unit of the Maine State Prison were curiously designated essential, no "lack of preservation of life or property" allegation has been made by the Association with respect to any specific employee or classification. -33- SELRA.7 There is no evidence that any effort was made by the State either to implement or to prepare to implement the layoff or recall provisions of the parties' contracts during the three-day period July 8 through 10, 1991, when employees were called back to work for three days pursuant to emergency legislation. The possibility that additional budgetary authority might not exist at the end of that three-day period was, if not likely at that point, at least very foreseeable. Accordingly, the defense of exigent circumstances was no longer available when budgetary authority lapsed again on the eleventh of July, 1991. The contractual layoff procedures were not applied at any time during the second shutdown period (July 11 through 16, 1991). Regardless of whether we conclude that the Seniority Article became applicable and that the violation occurred on July 14 (the fourth workday of the shutdown) based on the utter lack of State effort to implement the seniority provisions from that day forward; or, whether we conclude that 1) when the duration of the second shutdown or layoff exceeded three workdays the entire period of the second layoff was taken out of the contractual temporary layoff exception and 2) the violation therefore relates back to July 11 (the date on which the State at its peril failed to implement the layoff procedures), we find the State's widespread repudiation of the layoff or recall provisions of the Seniority Articles violates Section 979-C(1)(A) of the SELRA. The State was required to adhere to and apply all contract terms ___________________________________ 7Even "[o]therwise unlawful unilateral changes may be excused on the basis of one of four exceptions to the unilateral change rule: a bona fide impasse in negotiations on the subject; business exigency; waiver; and past practice. Maine State Employees Association v. State of Maine, No. 78-23, slip op. at 4 (Me.L.R.B. July 15, 1978), aff'd sum nom. State of Maine v. Maine Labor Relations Board, 413 A.2d 510, 2 NPER 20-11024 (Me. 1980)." Bangor Fire Fighters Association, Local 772 IAFF v. City of Bangor, slip op. at 12, n. 4 (Me.L.R.B. Aug. 9, 1993). -34- not rendered impossible by the lack of budgetary authority or waived by the Association. Implementation of the layoff provisions to determine on the basis of seniority which unit employees would perform the functions deemed to be "essential" or "emergency," was required in the absence of the defense of exigent circumstances. We shall now explain the effect on employee rights guaranteed by the SELRA which we think may reasonably be said to flow from the State's failure to apply the contractual layoff and recall provisions during the shutdown period July 11 through 16, 1991. By now it is abundantly clear that the Law Court interprets the specific zipper clause provisions contained in the contracts between these parties to preclude a finding of statutory refusal to bargain based on the State's violation of negotiated contract terms. See Bureau of Employee Relations v. AFSCME, Council 93, 614 A.2d 74, 77 (Me. 1992) (citing State v. MSEA, 499 A.2d 1228, 1231-33 (Me. 1985). However, refusal to bargain based on unilateral change within the meaning of Section 979-C(1)(E) is not a necessary prerequisite to a finding of prohibited employer interference, restraint or coercion within the meaning of Section 979-C(1)(A). We find that the widespread repudiation of the layoff provision established in this case has a reasonable tendency to interfere with a most fundamental collective bargaining right, the right to expect contract compliance. Section 979-C(1)(A) of the SELRA prohibits the State from directly or indirectly interfering with, intimidating or restraining state employees in the free exercise of any right under the SELRA. One such right is that of employees to be represented by labor organizations in collective bargaining for terms and conditions of employment. 26 M.R.S.A. 979 (1988). Section 979-D, entitled Obligation to bargain, defines negotiations as being comprised of meeting upon request and at reasonable times, conferring and negotiating in -35- good faith, participating in good faith in Board impasse resolution procedures and reducing to writing any agreements arrived at. These obligations and all of the employer and employee prohibitions contained in the SELRA have as their ultimate goal the establishment and protection of a system of public employment contracting. It is indisputable that the right of collective bargaining includes the right to expect compliance with the terms of agreements arrived at through collective bargaining negotiations. Were it otherwise the right to bargain collectively would be meaningless. There can be no surer method of defeating the purposes of the SELRA than to frustrate the expectation of either party that negotiated contracts must be performed.8 The expectation of contract compliance is no less than the sine qua non of the right to bargain collectively for wages, hours and terms and conditions of employment. Regardless of whether the State's failure or refusal to apply the appropriate provisions of the contract during the second July, 1991 shutdown period is viewed as widespread contract breach, statutory violation or both, the basic right to expect contractual performance is substantially and impermissibly undermined. Moreover, because job security based on seniority is a union's stock in trade, disregard of no other contract provision more ___________________________________ 8Relatedly, 26 M.R.S.A. 979-A(5), which requires the State in all its departments, agencies and commissions to be considered as a single employer, represented in its employer functions by the Governor, states in pertinent part: All state departments and agencies shall . . . take such administrative or other action as may be necessary to implement and administer the provisions of any binding agreement between the State and employee organizations entered into under law. We construe this obligation to support our finding of an inherent fundamental right of employees under SELRA to expect compliance with lawfully negotiated agreements. -36- effectively denigrates the exclusive collective bargaining agent than repudiation of a seniority article's layoff and recall provisions. Compensation other than for time actually worked The Association alleges that the State's failure "to pay vacation, sickness or bereav[e]ment benefits for employees who were entitled to such benefits during the period from July 1 to July 17, 1991," violates 26 M.R.S.A. 979-C(1)(A) and (E) (1988). We have previously discussed the inapplicability of 26 M.R.S.A. 979-C(1)(E) to contract breaches between these parties. Remaining to be resolved is the question whether a contractual breach or other conduct constituting a violation of 979-C(1)(A) has occurred with respect to the State's failure to provide employees compensation other that for time actually worked.9 In resolving these issues it is helpful to review the timetable of actions taken by the principal governmental participants. In a press conference on June 28, 1991, the Governor announced his plan of action to address any forthcoming lack of budgetary authority. Accompanying the announcement, for distribution, were written copies of the text of his remarks, written instructions to commissioners and agency heads and an informational bulletin for employees. The bulletin entitled "Common Questions about a State Government Closedown" states that "[e]mployees on vacation or sick leave will not be paid for closedown" and that employees cannot "use vacation time to be paid for this closedown." On failure of budgetary authority, July 1, 1991, the Governor issued a Proclamation of Emergency and by Executive Order implemented his previously announced plan of ___________________________________ 9State repudiation of or failure to comply with contract provisions respecting compensation other than for time actually worked, in this case, is not excused by exigent circumstances. -37- action. From July 1 through July 7, 1991, the Governor lacked budgetary authority.10 Budgetary authority was restored for a three-day period July 8 through 10, 1991.11 Legislation effective July 14, 1991, deappropriating certain personal services funding for employees represented by the Association authorized the State and the Association to agree upon cost-saving measures to effect the deappropriation prior to August 1, 1991, and, absent such agreement, authorized the Governor to implement any needed and contractually permitted cost-saving measures thereafter.12 On July 8 and also on a date no later than July 17,13 1991, the parties reached agreements extinguishing any entitlement to compensation for other than time actually worked during the respective shutdown periods. Budgetary authority was restored to the Governor on July 17, 1991, retroactive to July 1, 1991. The earliest pay dates upon which employees in Cycle B and A would ordinarily have been paid compensation earned in the earliest portion of the shutdown were July 23 and 30, 1991, respectively. Based on this chronology we find it evident that the Governor possessed no authority prior to July 17, 1991, to ___________________________________ 10The Attorney General advised the Governor that even for essential services, funds could not be disbursed without budgetary authority. 11The appropriations and allocations authorized by P.L. 1991 ch. 528 were not made retroactive to July 1, 1991, and by the terms of the Act expired July 11, 1991. 12We interpret the language in the Legislature's July 14, 1991, funding enactment to confirm the applicability of the parties' contracts during the entire shutdown. 13The agreement executed by the parties respecting the second shutdown period is dated "July , 1991," but provides that cycle A employees may make a specified election by notifying "their payroll office by 5:00 p.m. on Wednesday, July 17, 1991. The agreement is an attachment to a memo which is dated July 17, 1991. -38- disburse or encumber funds to pay compensation for other than time actually worked. On that day any remaining entitlement to such compensation was extinguished by the second of two agreements which treated the issue directly. Moreover, the last of the agreements was executed well before any such pay became due. We therefore dismiss the Association's allegation that the State violated 26 M.R.S.A. 979-C(1)(A) (1988) by failing to pay employees compensation other than for time actually worked. We now turn to the issue of whether the Governor violated 26 M.R.S.A. 979-C(1)(A) (1988) by his announcement that only emergency employees actually working would be paid and that vacation and sick leave would not be available during the shutdown. While a threat of future breach sufficient upon which to base a reasonable anticipation of repudiation does not in itself violate 26 M.R.S.A. 979-C(1)(E) (1988), it may constitute a violation of 26 M.R.S.A. 979-C(1)(A) (1988), if it has a reasonable tendency to deprive employees of the expectation that their contracts will be substantially performed. The Governor announced variously on June 28, 1991, that during the shutdown employees would receive compensation only for time actually worked.14 The Governor's statements would have been less problematic had they explained that the imminent lack of budgetary authority would be a product of the Legislative Branch and not the Executive, that both disbursement and encumbrance of funds for other than time worked by employees essential to the performance of emergency services would be unlawful during periods in which budgetary authority is lacking and that it would ___________________________________ 14This threatened repudiation of the contractual sick leave, vacation, bereavement leave, compensating time, and standby pay provisions (provisions respecting compensation for other than time actually worked) was not alleged to be excused at occurrence by any defense cognizable under the SELRA. -39- be, at least in the first instance, within the province of the Legislative Branch to determine whether budgetary authority would be restored for periods in which budgetary authority had previously been lacking. His statements contained no such ameliorative explanation. The Governor's statements were definitive, did not admit of any possibility of payment of compensation other than for time actually worked during the shutdown, and repudiated these contractual rights without exception across all five bargaining units. We find that they reasonably tended to interfere with employees' rights to expect substantial contract compliance. The parties reached agreements extinguishing the right to compensation for other than time actually worked--memorialized in Memoranda of Agreement executed immediately upon cessation of the respective shutdown periods (on or about July 8 and 17, respectively)--well in advance of any payroll dates upon which any compensation for other than time actually worked would ordinarily have been due to be paid. We find that this quick settlement of the issues respecting compensation for other than time actually worked substantially prevented the statement of anticipatory repudiation from adversely affecting employees' expectations of contract compliance in any significant and persistent manner. See generally, MSEA v. State Development Office, 499 A.2d 165, 169 (Me. 1985). We therefore find the effect of the violation to be de minimis. Conclusion In concluding, we are compelled to address our specific disagreements with the conclusions reached in the dissenting opinion. Our first disagreement concerns the question of whether it was alleged by the Association that the Governor's announcement that compensation would not be paid other than for -40- time actually worked was a violation of the SELRA. We construe the Governor's announcement to constitute a "suspension of contractual employment rights" within the meaning of the Section 979-C(1)(A) violation allegations in paragraph 9 of the amended complaint and to be a component of the "repudiation of collective bargaining agreements" alleged in the original complaint. Secondly, with regard to the CEPA defense, we note that the State did not at any time invoke the CEPA in defense of the Governor's actions and did not allege or establish that hinderance, delay or prevention would have in any way resulted. We are not willing to assume or to take official notice of any inherent "delay, prevention or hinderance," as necessarily flowing from the process of implementing the contractual procedures or arising as a consequence of the results of implementation of the contractual layoff provisions. Finally, if the CEPA had been alleged to be applicable, we would be inclined to find the CEPA defense merely coextensive with the defense of exigent circumstances, which we have found applicable only to the first shutdown period, herein. Based on the above and foregoing we find that the State's widespread disregard of the contractual layoff and recall provisions had a reasonable tendency to interfere with the exercise of employees' rights guaranteed by the SELRA and therefore constitutes interference, restraint or coercion within the meaning of 26 M.R.S.A. 979-C(1)(A) (1988). See Maine State Employees Association v. State Development Office, 499 A.2d 165, 168 (Me. 1985). Although back pay with interest is a usual component of Board make-whole remedies, the Association has waived any claim to monetary remedy for any and all violations found. To remedy the above-determined violation, we shall require the State to cease and desist from any such violations in the future, require the following Notice to Employees to be distributed by the State to all of its employees represented by the Association and require that the notice be posted for 30 days in all locations where notices to such employees are ordinarily posted. -41- ORDER On the basis of the foregoing stipulated record considered in light of the parties' written submissions and by virtue of and pursuant to the authority of the Board set forth in 26 M.R.S.A. 979-H (1988 & Supp. 1992), it is hereby ORDERED: 1. That the State shall cease and desist from interfering with employees' collective bargaining rights by failing or refusing to abide by contractual layoff and/or recall provisions of negotiated collective bargaining agreements in violation of 26 M.R.S.A. 979-C(1)(A) (1988). 2. That the State shall, during any future shutdowns of state government, implement layoff and/or recall provisions under collective bargaining agreements with employees. 3. That the State shall distribute copies of the attached notice to all employees of the State represented for the purposes of collective bar- gaining by the Maine State Employees Association. 4. That the State shall post copies of this notice for 30 days in all locations where notices of MSEA represented State employees are ordinarily posted. 5. That the State shall notify the Maine Labor Relations Board of the date of the posting of the notice and of the date of the completion of the 30-day posting period. Issued at Augusta, Maine, this 6th day of January, 1994. The parties are hereby advised MAINE LABOR RELATIONS BOARD of their right, pursuant to 26 M.R.S.A. 979-H (Supp. 1993), to seek review of this decision and order by the Superior Court. /s/__________________________ To initiate such a review, an Peter T. Dawson appealing party must file a Chair complaint with the Superior Court within fifteen (15) days of the date of issuance of this decision and order, and otherwise /s/__________________________ comply with the requirements of George W. Lambertson Rule 80C of the Maine Rules of Employee Representative Civil Procedure. Employer Representative Howard Reiche, Jr., dissenting in part -42- and concurring in part, renders the following: OPINION Nothing in the facts of this case respecting the Governor's implementation of a plan of action to deal with the absence of budgetary authority in July of 1991 constitutes a violation of any provision of the SELRA. I dissent in part from and concur in part with the majority opinion. I agree with the majority with respect to the "Cause of the Shutdown," the concept of a "Secondary Boycott" and the "Closure of Specified Agencies." I also agree that the Association has failed to establish a violation of SELRA based on failure to provide compensation other than for time actually worked, for the reasons expressed by the majority. I disagree with the majority's finding of a separate but legally insignificant Section 979-C(1)(A) violation in the Governor's announcement that no compensation would be paid during the shutdown other than for time actually worked. Close review of the complaint, as amended, reveals no allegation of violation predicated upon the announcement. The State is faulted in this case with failing to pay compensation other than for time actually worked. I would not find a violation based on charges not plead. Finally, I find that the Governor's failure to use contractual seniority provisions to determine which employees would perform essential services did not contravene either the parties' agreements or established past practice, was excused by the defense of exigent circumstances, and was taken pursuant to authority granted by the Civil Emergency Preparedness Act (CEPA), 37-B M.R.S.A. 701, et seq., which, by its terms, excuses strict compliance with, inter alia, the SELRA. Accordingly, I would find no violation of 26 M.R.S.A. 979-C(1)(A) or (E) (1988) and would completely dismiss the Association's complaint in this case. I shall now explain why I think the Governor's failure to use contractual seniority provisions to determine the identity of -43- employees who would provide emergency or essential services does not violate the SELRA. Shutdowns of state government based on lack of budgetary authority are not within the contemplation of the parties' agreements. Nothing in the agreements deals directly or indirectly with emergency circumstances such as these. The agreements only provide for discretionary temporary (three day) layoffs without regard to seniority (or purpose) and for the use of seniority when positions are to be "abolished" to accomplish a "reduction in force."15 There is no allegation or ___________________________________ 15The Seniority Article of the parties' contracts provides, in pertinent part: B. Layoffs When an appointing authority determines that a reduction in force is necessary, he/she shall determine the positions within each organizational unit which are to be abolished. An employee whose position is abolished may displace the least senior employee in the affected class in the unit division involved in a position for which the employee bumping is qualified to perform the work or may accept layoff. In lieu of layoff, the affected employee may elect to: (1) displace the least senior employee in the same class in any other unit division in the organizational unit; or displace the least senior employee in his or her present unit division in the organizational unit in a lower related class or a class which he or she has previously occupied provided that he or she has greater seniority than the employee being displaced and is qualified to perform the duties of the position. If no displacement rights exist in (1), then the employee may: (2) displace the least senior employee in any other unit division in the organizational unit in a lower related class or a lower class which he or she has previously occupied provided he or she has the seniority and is qualified to perform the duties of the position. If and when the State has attained the computer capacity to handle layoff and displacement matters, the following provision shall replace the present provision -44- evidence that any positions were abolished to accomplish a reduction in force. Moreover, there is no instructive pre- existing practice because of the unprecedented nature of these events and the zipper clauses in the parties' agreements excuse ___________________________________ defining displacement rights: In lieu of layoff, the affected employee may elect to displace the least senior employee in the same class in any other unit division in the organizational unit or displace the least senior employee in any unit division in a lower related class or a class which he or she has previously occupied provided that he or she has greater seniority than the employee being displaced and is qualified to perform the duties of the position. Any employee displaced pursuant to this provision shall have like displacement rights. No classified employee may displace any unclassified employee and no unclassified employee may displace any classified employee except in the classifications in the other service previously held. * * * * C. Notice of Layoff Employees to be initially affected shall be given written notice of a pending layoff as soon as practicable but at least ten (10) workdays before the effective date of the layoff. Such employees shall be required to reply in writing within five (5) workdays of notice of layoff as to their decisions on layoff and displacement rights. Employees who are displaced as a result of the exercise of other employees' bumping rights pursuant to the provisions of this Article shall be given notice of a pending layoff as soon as practicable, but at least five (5) workdays before the effective date of the layoff. Such employees shall be required to reply in writing within three (3) workdays of notice of layoff as to their decisions on layoff and displacement rights. Employees subject to actual layoff and not displacing other employees shall be entitled to notice of at least ten (10) workdays before layoff. Copies of any notices from the State to employees under this provision shall be given simultaneously to MSEA. -45- any obligation to bargain which otherwise might inhere. See Bureau of Employee Relations v. AFSCME Council 93, 614 A.2d 74, 77 (Me. 1992) (citing State v. MSEA, 499 A.2d 1228, 1231-33 (Me. 1985)). I agree with the opinion of the majority that the first shutdown was excused by exigent circumstances. I disagree, however, with the further conclusion that a second lapse in budgetary authority was foreseeable, if not likely. The Legislature's enactment and the Governor's approval of a budget of only three days in length to facilitate the operation of State government while a budget was finalized indicates to me that permanent resolution of the budget and not further lack of budgetary authority was the reasonably foreseeable circumstance. The relapse of budgetary authority created no less exigent circumstances than did the first lapse. The Governor's failure to use contractual procedures to determine which employees would perform essential functions was excused in both instances by the defense of exigent circumstances. Even if this were not the case, I would find the Governor's actions to have been undertaken pursuant to near plenary authority, vested in him by the Legislature in the CEPA, to deal with emergencies. Maine state employee collective bargaining rights are statutory and not constitutional in origin, and may be limited by the Legislature. The Maine CEPA contains one such limitation. The CEPA, which confers emergency powers upon the Governor in a wide range of circumstances including "imminent threat of widespread . . . injury or loss of life or property from . . . man made cause[s]," 37-B M.R.S.A. 703(2) (1989), authorizes the Governor to "[s]uspend the enforcement of any statute prescribing the procedures for conduct of state business, or other rules of any state agency, if strict compliance with the provisions of the statute, order or rule would in any way prevent, hinder or delay -46- necessary action in coping with the emergency."16 37-B M.R.S.A. 742(1)(C)(1) (1989). The CEPA also empowers the Governor to "[e]nlist the aid of any person to assist in the effort to control, put out or end the emergency or aid in the caring for the safety of persons." Section 831 of the CEPA states: In carrying out this chapter, the Governor and the executive officers or governing bodies of the political subdivisions of the State shall utilize the services and facilities of existing departments, offices and agencies of the State and all the political subdivisions thereof to the maximum extent practicable. The officers and personnel of all departments, offices and agencies shall cooperate with and extend their services and facilities to the Governor and to the civil emergency preparedness organizations of the State upon request. Even if the contracts' seniority provisions were otherwise applicable--requiring the use of seniority in determining which employees would fill positions determined to be essential--the Governor's failure to apply the contractual seniority provisions would be shielded from the SELRA's prohibited practice provisions because the process and result of applying the seniority provisions would have prevented, hindered or delayed the Governor in dealing with the emergency. The record establishes that the Governor attempted to discharge only the most indispensable of his constitutional responsibilities during the shutdown by employing, in accordance with the advice of the Attorney General, the fewest number of employees necessary to the effective provision of essential ___________________________________ 16Section 834 of the CEPA provides: Except as otherwise provided, all existing laws, rules and regulations inconsistent with this chapter or of any order or rule issued under the authority of this chapter shall be suspended during the period of time and to the extent that the inconsistency exists. 37-B M.R.S.A. 834 (1989). -47- services. It is indisputable that strict compliance with the contractual notice provisions respecting layoff was an impossibility. Each of the shutdowns lasted fewer than the required minimum ten work days of written notice of pending layoff. Additionally, even in the best of circumstances postal distribution of notices and returns of initial bumping elections compounded by the time required for notices to and responses by further-displaced employees would have undeniably delayed and hindered the moblization of essential employees. Finally, it is reasonable to assume that in most cases emergency services are best provided by qualified employees who are currently performing them at the time of the occurrence of the emergency. Whatever loss of efficiency or effectiveness the parties may have contractually deemed acceptable in non-emergency circumstances (in terms of refresher training, the establishment of predictable and productive working relationships and acclimation to technological and organizational changes having occurred since jobs were previously performed), they were not acceptable in this case. This was an emergency in which delivery of emergency services and the provision of those services at the least possible cost were the goals. CEPA permitted the Governor to attain those goals in this declared emergency, even if in so doing the interference and refusal-to-bargain prohibitions of SELRA were technically transgressed. In light of the above andforegoing analysis I would dismiss the Association's prohibited practice complaint in its entirety. Dated at Augusta, Maine, this 6th day of January, 1994. MAINE LABOR RELATIONS BOARD /s/_____________________________ Howard Reiche, Jr. Employer Representative -48- NOTICE TO EMPLOYEES _________________________________________________________________ ISSUED PURSUANT TO AN ORDER OF THE MAINE LABOR RELATIONS BOARD After written argument based on a stipulated factual record, IT HAS BEEN DETERMINED THAT WE HAVE VIOLATED THE LAW AND WE HAVE BEEN ORDERED TO POST THIS NOTICE. WE INTEND TO CARRY OUT THE ORDER OF THE MAINE LABOR RELATIONS BOARD AND ABIDE BY THE FOLLOWING: We will cease and desist from interfering with employees' collective bargaining rights by failing or refusing to abide by layoff and/or recall provisions of negotiated collective bargaining agreements in violation of 26 M.R.S.A. 979-C(1)(A) (1988). We will, during any future shutdowns of state government, implement layoff and/or recall provisions under collective bargaining agreements with employees. We will distribute a copy of this notice to all State employees represented by the Maine State Employees Association. We will notify the Labor Board of the date of the posting of this notice and of the satisfaction of the posting requirement at the end of the posting period. ____________________________ ___________________________________________ Date Representative of the Bureau of Employee Relations This notice must remain posted for 30 consecutive days from the date of posting. Any questions concerning this notice or compliance with its provisions may be directed to: STATE OF MAINE MAINE LABOR RELATIONS BOARD STATE HOUSE STATION 90, AUGUSTA, MAINE 04333 (207) 287-2015 THIS IS AN OFFICIAL GOVERNMENT NOTICE AND MUST NOT BE DEFACED.